MONTREAL - Rio Tinto Alcan says its smelter in Alma, Que. will continue to operate at one-third of its capacity following its decision to lock out hundreds of workers.

The company announced the lockout early Sunday morning after last-ditch contract talks collapsed and the union's contract expired.

The orderly shutdown of 144 out of 432 reduction cells began on Sunday, with the shutdown of another 144 cells beginning on Monday. That leaves only one-third of the 438,000-tonne Alma smelter's capacity in operation.

The company said plans are in place to ensure that aluminium production throughout the region continues to run safely and efficiently. Management hoped that would limit the impact on its customers.

Last Friday, about 800 workers from three negotiating units rejected what the company said would be its final offer.

Union officials had a strike mandate before the talks collapsed and had warned that a work stoppage could be imminent.

The Alma facility hosts one of Rio Tinto Alcan's (NYSE:RIO) most important North American aluminum smelters.